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Connecticut Bankruptcy Law Blog

Relief for credit card debt

When Connecticut residents realize they are overwhelmed with credit card debt, they may sometimes feel like this debt will never go away. However, there are several strategies people can use to remove this debt.

If people want to get out of debt, it is a good idea for them to understand exactly how much they owe. Time magazine says that people should typically sit down and create a list of how much debt they have on each credit card. This list should also include the interest rates so people know how much they are spending on interest each month. Once they have made this list, people may want to look at their budget so they know how much money they can put toward paying off their debt.

College graduates may find relief from their student debt

It is likely that many Connecticut residents either have one or more student loans or know someone who does. The overwhelming level of debt and difficulty paying it off has been well-documented recently in both national and local news.

The Connecticut Post reports that Connecticut college graduates have the third highest average student debt in the US and are ranked 20th regarding how the indebtedness affects them after graduation. Except for a mortgage, student loans are the most significant component of the average household debt. In this situation, the level of student loan debt is calculated using five factors that include the following:

  • Share of student loan borrowers 50 and older
  • Percentage of graduates with student loan debt
  • Share of student loans categorized as past-due or in default
  • Average student debt
  • Student debt to income ratio

What should I do after filing Chapter 13?

If you have filed for Chapter 13 bankruptcy in Connecticut and went through the process of setting up your plan, then you are now ready to put the plan to use. What you do after you file is very important. It will greatly affect your finances and your business if you do not follow the plan. The US Courts notes there are a few things that you need to keep in mind as you continue forward in the bankruptcy process.

The most important thing you have to do is make your payments on time. This should be very easy to do because payments should come directly through payroll deductions. If you miss a payment, you could face serious issues with your case and face liquidation of your assets.

What can I do to avoid foreclosure?

The prospect of foreclosure is daunting for Connecticut homeowners. However, if you’re unable to make mortgage payments that will be exactly what you’re faced with. Some homeowners are able to pursue alternatives, which can prevent a lengthy and often costly foreclosure process. Realtor.com explains 3 different ways to avoid foreclosure that might be available to you.

Deed in lieu of a foreclosure

The new phenomenon of gray bankruptcy

At the Law Offices of Charles A. Maglieri in Connecticut, we see an ever growing number of senior citizens coming to us for help in filing bankruptcy. As the New York Times recently reported, if you are 65 or older, your inadequate pension and personal savings, plus the rising costs of medical care and prescription drugs, may have put you in the position where bankruptcy is your only realistic option. A recent study shows that seniors such as you represent 12.2 percent of all bankruptcy filers today. In 1991, seniors represented only 2.1 percent of filers.

Unfortunately, the dream of one’s senior years also becoming the golden years no longer applies to the majority of Americans. Many factors, including the following, have made it impossible for today’s seniors such as you to retire in comfort:

  • Extensive debt
  • Little or no savings
  • Medicare coverage gaps
  • Skyrocketing medical costs
  • Longer waits for Social Security benefits

What is the HAFA program?

If your debt situation has gotten out of hand and you fear losing your Connecticut home to foreclosure, you may wish to consider the Home Affordable Foreclosure Alternatives program. As HomeOwnership.org explains, HAFA is a federal governmental program that gives you a foreclosure alternative if you wish to short sell your home or give a deed in lieu of foreclosure to your mortgage lender.

You must meet all six of the following criteria to receive HAFA help:

  1. You must be undergoing a documented financial hardship.
  2. You must have purchased your home more than 12 months ago.
  3. You must have a first mortgage less than $729,750.
  4. You must have obtained your mortgage prior to Jan. 1, 2009.
  5. You must have had no felony convictions in the preceding 10 years for such real estate related crimes as theft, larceny, fraud, tax evasion or money laundering.
  6. Your mortgage must be owned or guaranteed by Fannie Mae and Freddie Mac.

What is predatory lending?

One of the first things you might want to do after a bankruptcy discharge is to repair your credit. As you know, getting approved for a loan is one of the most effective ways to do this. You and other Connecticut residents may find it encouraging to learn that you may have many borrowing options after a bankruptcy. However, you should also learn how to recognize a valid lender from one that is considered predatory.

As NerdWallet explains, predatory lenders often target people fresh out of a bankruptcy or with few financial options, because they are more vulnerable and often eager to get a fresh start and repair their credit. Unscrupulous lending practices can quickly backfire on you and leave you with additional insurmountable debt and ruin your credit again.

What is lien stripping?

If you have a second mortgage on your Connecticut home, you know that your second mortgage holder has the same right as your primary mortgage holder to foreclose on your home if you fail to make your required mortgage payments. What you may not realize, however, is that if you file for Chapter 13 bankruptcy in order to reorganize your debts, you may be able to prevent your second mortgage holder from exercising its foreclosure rights. As SFGate.com explains, such a procedure goes by the name of lien stripping

Unlike a Chapter 7 bankruptcy that discharges your consumer debt but fails to protect your home, a Chapter 13 bankruptcy is a debt reorganization that gives you the opportunity, usually over a three- or five-year period, to get caught up on your debts. Not only does Chapter 13 save your home from foreclosure, in many cases it also can strip your second mortgage holder of the lien it has on your home.

Is Chapter 11 right for me?

You have experienced financial difficulties for several months, but you tried unsuccessfully to get your head above water and conquer your insurmountable debt. You realize that the time has come to consider filing for bankruptcy. A bankruptcy discharge could solve many of your problems, you realize, but you also worry that you might not qualify for Chapter 7 because you have a steady income and may not pass the means test. You and other Connecticut residents may benefit by learning how a Chapter 11 bankruptcy could be the better option.

As you may know, Chapter 11 restructures your debt and allows you to make manageable payments over a period of three to five years, unlike Chapter 7, which discharges your eligible debt. However, those who qualify for Chapter 7 may lose their homes, extra vehicles and other assets to repay creditors before receiving their discharge. FindLaw explains that if you want to keep your home and vehicles, and you have a steady job, Chapter 11 could be your route to debt relief.

The top 5 things you should do after bankruptcy

At the Law Offices of Charles A. Maglieri in Connecticut, we help people file and successfully negotiate their way through bankruptcy. Once you begin your post-bankruptcy life, you should do several things to ensure that it will be far better than the one that led to your financial problems.

One thing you may be most eager to do is reestablish your credit. Before getting a new credit card, however, Credit.com recommends you do four other things first.

Discuss Your Case With A
Respected Bankruptcy Attorney

Contact my office to discuss your debt relief needs directly with me as your lawyer. I offer a free initial consultation to all new clients where you can learn more about your legal options and what I can do to help you. I am available during regular business hours and by appointment at other times. You can reach me by phone at 860-242-0574 and 860-952-3674 or via email.

My law firm is a debt relief agency as so designated by Congress in the year 2005. I help people file for bankruptcy relief under Title 11 of the United States Code, known as the Bankruptcy Code.

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Bloomfield Office
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Bloomfield, CT 06002

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